The Wall Street Journal reported Friday that Motorola is hard at work on an 'X Phone,' a flagship smart phone that would stand out from handsets made by Apple and Samsung. But 'X Phone' development may be running into some early obstacles.

When Google purchased Motorola last year for $12.5 billion, there was lots of speculation about what was behind the deal. Was Google only interested in Motorola’s portfolio of patents? Or did it hope to put the company’s engineers to work on its own projects?

New rumors suggest that it’s largely the latter: The Wall Street Journalreported Friday that Motorola is hard at work on a flagship Android phone known internally as the “X Phone,” to be released some time in 2013. Citing “people familiar with the matter,” the Journal says the X Phone is designed to stand head and shoulders above current handsets, although engineers are running into some early obstacles.

Motorola and Google apparently have big plans for the X Phone: Motorola is investigating materials that would make the display more flexible and less likely to crack or break under pressure, and the company wants to include better camera software and gesture recognition while simultaneously boosting battery life. It’s too early to speculate on the size of the phone or the features it will include, but the Journal’s sources say Motorola will also begin building an X Tablet once the phone has been completed.

The X Phone would run what’s known as “vanilla” Android: a pure version of the OS that comes directly from Google. Right now only the Nexus line of phones, including Samsung’s popular Galaxy Nexus, run vanilla Android; all other handsets have extra code added by manufacturers, like Samsung’s “TouchWiz” UI or HTC’s “Sense.” Lots of users find these additional features helpful, but others prefer the flexibility of being able to use a version of Android that doesn’t have the manufacturer’s “stamp.”

But along with developing the X Phone, Google and Motorola have to carefully navigate their delicate relationships with other companies that make Android handsets -- especially Samsung. Samsung has become the biggest smart phone maker in the world, thanks in no small part to a warm relationship with Google -- but it’s also a rival to Motorola. Google wants to boost Motorola’s sales (Motorola commands an anemic 3 percent of the Android phone market, compared to Samsung’s 40 percent) but doesn’t want to jeopardize its relationship with Samsung or other manufacturers.

By the way, if you own one of Motorola’s existing Droid phones, don’t worry: the company will continue to produce them for Verizon, its carrier partner, as well as devoting resources to developing the X Phone. In spite of poor sales, many of the Droid phones Motorola released in 2012 were well-received by critics.

What are your thoughts on the X Phone? Do you think Google and Motorola can design a handset that stands apart from everything else on the market? Let us know in the comments section below.